The 2012 comparative balance sheet and income statement of Brookman Medical Supplies follow:

Brookman Medical Supplies had no noncash investing and financing transactions during 2012. During the year, Brookman Medical Supplies made no sales of land or equipment, no issuance of notes payable, no retirement of stock, and no treasury stock transactions.

Requirements
1. Prepare the 2012 statement of cash flows, formatting operating activities by the indirect method.
2. How will what you learned in this problem help you evaluate an investment in Brookman MedicalSupplies?

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Brookman Medical Supplies Comparative Balance Sheet December 31, 2012 and 2011 INCREASE (DECREASE) 2012 2011 Current Assets Cash and Cash Equivalents Accounts Receivable Inventory S 6,700 S5,100 S 1,600 25,100 26,500(1.400) 91,500 89,400 2,100 Fixed Assets: Land Equipment, Net 89.900 60,600 29,300 4,200 S266,600 $230,800 S 35,800 53,400 Total Assets Current Liabilities: Accounts Payable S 30,600 S 35,800S (5,200) Accrued Liabilities Notes Payable Common Stock 30,90028,2002,700 76.000 100,000 (24,000) 88,700 64,10024,600 Long-Term Liabilities: Stockholders' Equity Retained Earnings 40,400 Total Liabilities and Stockholders' Equity 266,600 S230,800 S35,800 Brookman Medical Supplies Income Statement Year Ended December 31, 2012 Revenues: Sales Revenue Interest Revenue $210,000 8,400 Total Revenues $218,400 Expenses: Cost of Goods Sold Salaries Expense Depreciation Expense Other Operating Expenses Interest Expense Income Tax Expense S 70,600 27,800 4,900 10,800 11,700 29,000 Total Expenses Net Income S 63,600